3 Key Disclosure Areas In Your Year-End Financial Statements

If you are a controller or CFO preparing your year-end financial statements for shareholders, regulators and lending institutions, there are several disclosure items you should carefully consider. Over the last several years, accounting and securities regulatory bodies have had a great deal to say about this subject. The following three areas are especially significant.

Management's judgments, estimates and assumptions

The nature of financial statement preparation often includes many areas where management is required to make judgments, calculate estimates and use a number of assumptions to arrive at the financial account balance for the reporting period. For the users of financial statements to fully understand the nature of these judgments, estimates and assumptions, it is important to disclose any uncertainties or sensitivities that are significant to the balance. Uncertainties will include disclosures of key inputs such as discount rates, the basis for